Settlement Agreements

What is a Settlement Agreement?

A Settlement Agreement (formally known as a Compromise Agreement) is a legally binding contract between you and your employer. Usually, in a Settlement Agreement the employer will offer compensation to an employee in exchange for that employee giving up their employment and agreeing not to bring any claims against the employer. There can be a number of variations and sometimes an employee may agree to take a different job or move to a different location; however there will be a bargain or exchange between the Employer and Employee in the Settlement Agreement.

Whilst a Settlement Agreement may appear to be a normal contract, due to the inequality of the relationship between an employer and an employee, there are a number of additional legal requirements which must be observed before it can become binding and be enforced (if necessary) by the parties signing it. One of those requirements is that the employee must receive independent legal advice before signing the Settlement Agreement. Often the solicitor will have to sign a declaration with the Settlement Agreement confirming they have given such advice and that the Employee fully understands the consequences of signing.

It is likely that if you sign a Settlement Agreement you will lose your job and/or be losing your right to take action against your employer. In addition, the Settlement Agreement may contain clauses which prevent you from working in a particular area or in a particular industry. The consequences of signing a Settlement Agreement are potentially life changing. Whilst this may be a positive step for you and you may be happy to sign, you must make sure you understand the terms of the Settlement Agreement. In any event, you are obliged to take legal advice before you sign the Settlement Agreement and you should make sure you take full advantage of that advice and require your solicitor to go through the contract with you thoroughly.

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

How much do LincsLaw Solicitors charge to advise on a Settlement Agreement?

If you have been offered a Settlement Agreement (previously called a Compromise Agreement) by your employer, you must obtain independent legal advice before signing. LincsLaw Solicitors charge £300.00 (£250.00 plus vat) to advise you on your Settlement Agreement. The convention (although it is not a requirement) is that your employer will pay our fees for advising you.

Our fee includes a meeting with your solicitor to discuss the background of your situation and advise you on the terms of your Settlement Agreement. We put no time limit on your meeting as we understand the decision to sign a Settlement Agreement is important and has potentially life changing consequences. Put simply, we are happy for your meeting to take as long as you need. The fee also includes written confirmation of advice following the meeting.

For most people, a Settlement Agreement is dealt with at the first meeting and no further assistance is required. However, the reason we take the time to discuss the full background of your situation is to ensure you are being properly compensated for circumstances surrounding you being offered a Settlement Agreement. If you are not being properly compensated, we will advise you fully on the alternatives available to you. For example, if you are being made redundant, but are being offered the same or less than the amount to which you are already entitled by virtue of your years of employment, then there is no benefit to you in signing the Settlement Agreement. Your employer is asking you to sign away all your employment rights for monies you already have a legal entitlement to receive.

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

What happens if I decide not to sign my Settlement Agreement?

If you instruct LincsLaw Solicitors, we will meet with you to discuss the background of your situation and to advise you on the consequences of signing your Settlement Agreement (previously called a Compromise Agreement). It is important that you understand you are under no obligation to sign the Settlement Agreement. The decision whether to sign should only be made once you have been given full legal advice and you are able to make an informed choice.

For some people, their decision about their Settlement Agreement is straightforward. For example you could have volunteered for redundancy, and are receiving a more generous payment than you would otherwise in exchange for signing the Settlement Agreement. Alternatively, you could be in dispute with your employer and have already negotiated a compensation payment you are happy with.

In both the above scenarios you can benefit from the advice of your solicitor to determine the value of the redundancy or compensation you would have received without the Settlement Agreement (and therefore you can understand clearly what benefits you are gaining by signing). Also, your solicitor can advise on any "extras" in the Settlement Agreement such as restrictive covenants or strange payment arrangements.

For some clients the situation is not straightforward. You may have been given a Settlement Agreement without warning by your employer and are struggling to come to terms with the shock of such an offer being made to you. If you have been offered a Settlement Agreement in those circumstances, you need to make sure the solicitor giving you advice fully explains all your options and enables you to make an informed decision.

What will actually happen depends on your personal circumstances. However, those employees who are advised about their Settlement Agreements by LincsLaw Solicitors Solicitors are given clear advice about their choices.

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

Is the compensation payment my employer is offering in my Settlement Agreement a fair amount?

If you instruct LincsLaw Solicitors, we will meet with you to discuss the background of your situation and to advise you on the consequences of signing your Settlement Agreement (previously called a Compromise Agreement). As part of our discussion, we will consider the compensation being offered by your employer against your personal circumstances.

Through our years of experience we have seen the full gambit of Settlement Agreements (formally Compromise Agreements). For some clients, compensation payments have been generous and we have been able to show the client a clear advantage in signing the Settlement Agreement. For others we have had no hesitation in advising them not to sign as they were only being offered payments they already had a right to received through their statutory rights or their contract of employment. In those circumstances, there was no advantage to them in signing away their employment rights and giving up their job. Other clients have had different personal priorities, for example they may be more worried about being released from a restrictive covenant than a compensation payment.

In summary, whether the compensation payment offered to you under a Settlement Agreement is fair will depend on your employment circumstances, your personal circumstances and your personal priorities which is why we take the time to go through the full background of the situation with our clients before advising them on their Settlement Agreement.

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

Do I have to meet with you to advise on my Settlement Agreement?

At LincsLaw Solicitors we take our responsibilities to advise you on your Settlement Agreement (formally called a Compromise Agreement) seriously. The consequences of signing a Settlement Agreement are potentially life changing. Even if you are happy about leaving your employment and/or the compensation you receiving, there are still discussions needed about the full terms of the binding contract you are signing.

In our experience, when drafting Settlement Agreements employers seek to protect themselves against all claims, competition and publicity in respect of their employees. Therefore, there are often a number of ways an employee could find themselves unwittingly in breach of the Settlement Agreement (and therefore negate the employer’s obligation to pay compensation) if they are not advised fully and properly about the terms.

We consider the best way of advising you is for us to sit down together to get the full background of your situation. We can then go through the Settlement Agreement and make sure you know exactly what you are signing. We are flexible with our appointments and can usually arrange a time and location to suit you.

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

Where can I meet with you to advise on my Settlement Agreement?

Our offices are conveniently located in Lincoln at Greetwell Place, Lime Kiln Way, Lincoln LN2 4US. There is ample free parking available and no restriction on the time you are able to park.

If you are unable to attend our offices, we would be happy to meet with you at your home or other location within 15 miles of LN2 4US (as per AA Route planner). Please be aware there will be charge for travel time in those circumstances (please contact us for details). Also, please note that for home visits and appointments outside of our offices, payment for the appointment and travel charge will be required in advance (this will be reimbursed if or when fees and charges are paid by your employer).

If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

Can I arrange an appointment at the weekend for you to advise on my Settlement Agreement?

LincsLaw Solicitors Solicitors is open from 8.30am to 5.30pm Monday to Friday and 9.30am to 12.00noon on Saturdays. We would be happy to meet with you during those hours. Saturday morning appointments are extremely popular so please book early to avoid disappointment.

If the opening times above are not convenient for you, we can usually arrange an appointment to suit your availability. If you wish to discuss your Settlement Agreement, please contact Lincoln based LincsLaw Solicitors for a free, no obligation discussion.

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LincsLaw Solicitors is a trading name of Lincs Law Ltd. Lincs Law Ltd is a private limited company registered at Companies House (Company Registration Number: 9135885). Lincs Law Ltd is authorised and regulated by the Solicitors Regulation Authority under SRA Number: 622559. Lincs Law Ltd is registered for VAT under Registration Number 219 1768 92